An Nvidia Competitor Just Turned Down Meta's $800 Million Offer to Buy It. Here's Why.

South Korean AI startup FuriosaAI is taking on the likes of Nvidia and AMD with its AI chips — and it doesn't need Meta's help to compete.

According to a local news report from the South Korean news site Maeil Business Newspaper earlier this week, Meta began full-scale negotiations to acquire FuriosaAI this year. Meta proposed to buy the startup for $800 million, over $250 million more than its current market value of $545 million. The tech giant was interested in furthering its own AI chip-making endeavors by absorbing the startup's technology and talent.

The report said that negotiations broke down because the two parties disagreed about the direction of FuriosaAI's business after the possible acquisition. If Meta had acquired FuriosaAI, the startup's staff would have had to create customized AI chips solely for Meta's AI services instead of developing more broadly available AI chips to compete with Nvidia and other AI chipmakers.

FuriosaAI turned down Meta's offer to keep developing its own AI chips as an independent business, per the report.

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FuriosaAI announced its latest AI chip, RNDG (pronounced Renegade), in August 2024. The startup claimed that the chip requires only 12.5% of the energy of existing chips, with three times better performance per watt than one of the most powerful chips on the market — Nvidia's H100 chips.

In an interview with Maeil Business News, FuriosaAI CEO Jun-ho Baek said that the company was "confident in the success of RNDG" and plans to mass-produce the chip in the second half of the year.

"Furiosa AI is ready to change the paradigm of the AI semiconductor market with efficient solutions," Baek told the outlet.

According to Bloomberg, FuriosaAI is in the process of sending samples of its chips to about a dozen potential customers, including LG AI Research.

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Baek founded FuriosaAI in April 2017 after developing products for AMD in Orlando, Florida, and Samsung Electronics in South Korea. The startup now has about 150 employees, including 15 who are based in a Silicon Valley office, per Bloomberg. It developed its first AI chip, Warboy, in 2021.

Meta, meanwhile, has already announced its intention to spend heavily this year on AI to better compete with rivals like OpenAI and Google. Meta CEO Mark Zuckerberg said in January that Meta would spend up to $65 billion in 2025 alone on AI, including building data centers and adding more members to its AI workforce.

FuriosaAI isn't the first startup to reject an acquisition offer from a Big Tech company. Cybersecurity startup Wiz turned down Google's acquisition offer of $23 billion last summer before accepting an offer of $32 billion earlier this month.